Applied Statistics and Probability
for Engineers
Seventh Edition
Douglas C. Montgomery George C. Runger
Chapter 7
Point Estimation of Parameters and Sampling
Chapter 7 Title Slide Distributions
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ved
7 Point Estimation of Parameters and
Sampling Distributions
CHAPTER OUTLINE
7.1 Point Estimation 7.3.5 Mean Squared Error of an
7.2 Sampling Distributions and Estimator
the Central Limit Theorem
7.3 General Concepts of Point
Estimation
7.3.1 Unbiased Estimators
7.3.2 Variance of a Point
Estimator
7.3.3 Standard Error: Reporting
a Point Estimate
Chapter 7 Contents
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Learning Objectives for Chapter 7
After careful study of this chapter, you should be able to do the following:
1. Explain the general concepts of estimating the parameters of a
population or a probability distribution
2. Explain the important role of the normal distribution as a sampling
distribution and the central limit theorem
3. Explain important properties of point estimators, including bias,
variances, and mean square error
4. Construct point estimators using the method of moments and the
method of maximum likelihood.
5. Compute and explain the precision with which a parameter is estimated
6. Construct a point estimator using the Bayesian approach
Chapter 7 Learning Objectives
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Point Estimation
• A point estimate is a reasonable value of a population
parameter.
• are random variables.
• Functions of these random variables, and , are also
random variables called statistics.
• Statistics have their unique distributions which are
called sampling distributions.
Sec 7.1 Point Estimation
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Point Estimator
Sec 7.1 Point Estimation
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Some Parameters & Their Statistics
• There could be choices for the
point estimator of a parameter.
• To estimate the mean of a
population, we could choose the:
Sample mean.
Sample median.
Average of the largest &
smallest observations in the
sample.
Sec 7.1 Point Estimation
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Some Definitions
• The random variables are a random sample of size if:
a) The are independent random variables.
b) Every has the same probability distribution.
• A statistic is any function of the observations in a
random sample.
• The probability distribution of a statistic is called a
sampling distribution.
Sec 7.2 Sampling Distributions and the Central Limit
Theorem
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Central Limit Theorem
Sec 7.2 Sampling Distributions and the Central Limit
Theorem
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Example 7.2 | Central Limit Theorem
Sec 7.2 Sampling Distributions and the Central Limit
Theorem
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Sampling Distribution of a Difference in
Sample Means
Sec 7.2 Sampling Distributions and the Central Limit
Theorem
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Unbiased Estimators
Sec 7.3.1 Unbiased Estimators
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Example 7.3 | Sample Mean and Variance
are Unbiased
• Suppose is a random variable with mean and variance . Let be a random
sample of size from the population represented by
• Show that the sample mean and sample variance are unbiased estimators of
and respectively.
Sec 7.3.1 Unbiased Estimators
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Variance of a Point Estimator
Sec 7.3.2 Variance of a Point Estimator
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Standard Error: Reporting a Point Estimate
Sec 7.3.3 Standard Error: Reporting a Point Estimate
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Example 7.4 | Thermal Conductivity
• The following 10 measurements of thermal conductivity of Armco iron were
obtained:
• A point estimate of the mean thermal conductivity and 550 watts is the
sample mean or
• Because σ2 is unknown, we may replacePractical
it with the standard
Interpretation: Notice thatdeviation s=
the standard error is
0.284 to obtain the estimated standard have
error
about 0.2of as:
percent of the sample mean, implying that we
obtained a relatively precise point estimate of thermal
conductivity. If we can assume that thermal conductivity is
normally distributed, two times the standard error is 2σ2x-
bar = 2(0.0898) = 0.1796, and we are highly confident that
the true mean thermal conductivity is within the interval
41.924 +- 0.1796 or between 41.744 and 42.104
Sec 7.3.3 Standard Error: Reporting a Point Estimate
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Bootstrap Standard Error
• Situations with some of the standard probability distributions, such as the
exponential and Weibulll distributions
• The bootstrap is a computer – intensive technique
• The bootstrap procedure would use the computer to generate bootstrap
samples randomly from the probability distribution and calculate the
bootstrap estimate
• Sample mean:
• Sample standard deviation:
Sec 7.3.4. Bootstrap Standard Error
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Mean Squared Error of an Estimator
The mean squared error is equal to the variance of the estimator plus the squared bias
Sec 7.3.5 Mean Squared Error of an Estimator
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Mean Squared Error of an Estimator
If this relative efficiency is less than 1,
we would conclude that the first
estimator is a more efficient estimator
than the second estimator, in the sense
that it has a smaller mean squared error
An estimator that has a mean squared error that is less than or equal to the
mean squared error of any other estimator, for all values of the parameter
estimator, is called an optimal estimator of . Optimal estimators rarely
exist.
Sec 7.3.5 Mean Squared Error of an Estimator
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